UP, Gujarat dilute new realty law

While UP has come up with four exemptions to exclude incomplete projects from the category of “ongoing projects”, Gujarat has exempted all projects launched before notification of the rules.Dipak K Dash | TNN | November 04, 2016, 07:35 IST

NEW DELHI: States led by UP and Gujarat have begun diluting provisions of the Real Estate (Regulation & Development) Act, which notify the rules for regulation of the sector. Both states have let off most ongoing real estate projects which have been delayed for long and remain a worry for thousands of home buyers awaiting delivery.

While UP has come up with four exemptions to exclude incomplete projects from the category of “ongoing projects”, Gujarat has exempted all projects launched before notification of the rules. This means such projects won’t have to be registered with the real estate regulator in these states.

On the contrary, the law enacted by the Centre earlier this year provides for mandatory registration of all “ongoing projects” that have not received completion certificate.

“The central law, which is binding on all states, does not differentiate between ongoing and future projects for registration. However, it provides for registration of incomplete projects within three months from the commencement of the Act,” said an official here.

The norms notified by UP excluded projects in which services had been handed over to the local authority for maintenance, common areas and facilities that had been handed over to RWAs for maintenance and where development work had been completed and sale and lease deeds of 60% houses executed.

“This dilutes norms laid down in the law and will help builders avoid the mandatory regulatory provisions,” the central government official said.

Defending their move, a Gujarat government official said, “We have notified the rules primarily for setting up the regulator ahead of the October 31 deadline. Once the operative part of the law comes into effect, we may revisit the norms”.

But central government sources said states must notify specific rules in compliance with the law and it wouldn’t take not more than a couple of days to make all provisions operative.

On its part, the Uttar Pradesh government has also provided a handle for developers to retain some land in their projects under the guise of commercial activity rather than hand over such land to house owners.

While the central law clearly says that all community and commercial facilities in a project will be treated as common areas, rules notified by UP says, “Community and commercial facilities shall include only those facilities, which have been provided as common areas.”